I can report that CIT is likely to file bankruptcy tomorrow (Friday), though the situation remains fluid, according to a source close to the company.
The company has been taken by surprise at the failure of talks with its regulators to craft a solution over the last three weeks and is now pursuing a plan that is likely to include a Chapter 11 filing on Friday.
CIT — a lender to hundreds of thousands of small and mid-sized U.S. businesses — said on Wednesday that bailout talks with the government had ended, a development that could ultimately drive the it into bankruptcy.
- CIT Talks Fall Apart, Bankruptcy Filing Likely Friday
The news follows last-ditch talks in which Treasury officials had expressed concern about a worsening liquidity crunch at the 101-year old lender and indications that government aid would not put it on a path to recovery.
(Ed. Note: This post has been updated to clarify the day reference).
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